People's Leasing Finance SMLL - Warrants vs Normal shares

kiwi

kiwi

Senior Equity Analytic

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Location : Hobbiton, Middle Earth

Today the SMLL 2012 Warrants have been listed. They are trading currently at around the Rs 27 mark after trading much higher than that. When the warrants are exercised in 2012, the holders will need to pay a further Rs 30, making a total of Rs 57. The SMLL.N shares are currently trading at around the Rs 47 mark. Normally there is a difference between the two to account for the holding cost from now till whenever the warrants are exercised. But a Rs 10 margin seems absurd. Either SMLL.N is under priced or the SMLL.W0020 is over priced. I just can't make sense of it. Now I am sure there will be those who say you can't expect things to make sense as this is the CSE, but I am interested in hearing from others as to what they think.

deen

deen

Senior Equity Analytic

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SMLL is undervalued at the current level as it went upto more than rs.90 so SMLL will definitely reach more than rs.60 in a short period. People leasing holds 90% of this share. SMLL 2012 warrant is illiquid in this market so therefore only a few shares are in the hands of the public. Thus theres a lot of demand more than supply.
People who bought the rights in the market will sell this at current level.

kiwi

kiwi

Senior Equity Analytic

Posts : 88
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Join date : 2011-05-03
Location : Hobbiton, Middle Earth

Deen, thanks for the quick reply. I agree with you that SMLL is undervalued at the current prices, specially after reading the latest set of accounts. At the current prices, it makes much more sense to pay Rs 48 and buy the share today than buy the warrants at Rs 28 which have a further Rs 30 cost to come at conversion. As we speak I see that there is some movement in the SMLL share price. I have been following the stock and have been slowly collecting. I was expecting the Warrants to trade under Rs 20. As the price seems absurd, I will sell my warrants and buy the share as I am in it for the long term.

SL.Market

SL.Market

Vice President - Equity Analytics

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I sold my all warrats today and bought more smill.N withh that money.
That is my stretergy
Happt Trading

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People's Leasing Finance SMLL - Warrants vs Normal shares

1 People's Leasing Finance SMLL - Warrants vs Normal shares Fri Jun 10, 2011 11:06 am

kiwi

2 Re: People's Leasing Finance SMLL - Warrants vs Normal shares Fri Jun 10, 2011 11:24 am

deen

3 Re: People's Leasing Finance SMLL - Warrants vs Normal shares Fri Jun 10, 2011 11:32 am

kiwi

4 Re: People's Leasing Finance SMLL - Warrants vs Normal shares Fri Jun 10, 2011 3:09 pm

SL.Market

5 Re: People's Leasing Finance SMLL - Warrants vs Normal shares

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